A six-month audit of the Southern Nevada Regional Housing Authority disclosed findings described by agency Executive Director John Hill as “a bump in the road.”

There was no fraud uncovered, nothing criminal in the review of a two-year period ending September 2013.

But the audit found two “significant deficiencies.”

— The authority spent some of its public housing operating funds for ineligible expenses, including bottled water for employees, and didn’t follow the Department of Housing and Urban Development’s procurement regulations.

— The authority did not have adequate inventory procedures and lost a dozen appliances valued at $5,500.

The office of Inspector General of the Department of Housing and Urban Development sent two inspectors to Southern Nevada. They looked at eight of the authority’s 164 vendors with contracts exceeding $10,000.

Their findings made public Monday involved some big numbers. For instance, the $485,190 cost for landscaping at Marble Manor at Washington and H streets was taken out of the operating account instead of the capital account. That meant it was an ineligible expense, easily fixed by moving money between accounts.

Then there were smaller ineligible expenses — $22,289 in total. The biggest ineligible expense was $12,520 for bottled water for employees, followed by $6,650 for entertainment and social events, $2,494 for holiday celebrations and $625 for meals at resident meetings.

The inspectors questioned whether a $187,731 contract for janitorial services was the best value, and said a security contract should have been let out to bid again after five years, but didn’t criticize the cost.

HUD blamed the lack of sufficient knowledge of HUD requirements for the ineligible expenditures. Referring to the janitorial contract, HUD said the authority “inappropriately restricted competition and did not ensure that all bidders received fair, impartial and equitable treatment.”

The authority couldn’t locate $5,500 worth of appliances — a dozen ranges and refrigerators. Hill said the problem was that there was no tracking system if an appliance was taken from the warehouse to go to one place and ended up in another.

The cure suggested by HUD: Develop policies and procedures and provide staff with training on operating funds, procurement, contracting and inventory contracts.

The Southern Nevada Regional Housing Authority merged the Las Vegas Housing Authority, the Clark County Housing Authority and the North Las Vegas Housing Authority by January 2011. The merged authority has an annual budget of nearly $145 million and public housing for 14,000 low-income households, some in public housing units and others using Section 8 vouchers.

There was a prior audit in January 2013 involving “significant deficiencies” because the authority didn’t make sure proper wages were paid by contractors. Workers were underpaid by $7,300.

Hill said he couldn’t be certain that the six-month audit was launched in reaction to the women’s complaint or other complaints because the inspector general’s offices don’t usually acknowledge where the complaint originated. Turner said the inspector general never acknowledged the complaint. The inspectors began their work in October 2013 and finished in February 2014.

“We determined that the allegations in the complaint had merit. The authority did not always use its public housing operating funds in accordance with HUD requirements,” the audit said.

Nothing was found in the audit pertaining to the allegation that former County Commissioner Yvonne Atkinson-Gates was doing anything improper regarding obtaining construction contracts with the authority, one of the allegations in the housing activists’ complaint. Her construction company received four contracts over one year and came in as the lowest bidder and the complaint questioned the bidding process.

Asked to evaluate the seriousness of the inspector general’s findings, Hill answered, “OIG always has some findings. It’s serious if you don’t fix them.”

“We’ve had over 60 accomplishments in the past three years,” Hill said. “We’ve come a long way. The merger has worked, it was a good idea.”

It hasn’t saved money as some officials had hoped, but Hill said the authority has “become more efficient, there are more seamless transitions.”

“We’re changing the face of affordable housing,” Hill said.

Board member Tim O’Callaghan agreed that the authority’s operations have improved. “It was a tough transition when it merged,” he said, but “absolutely” it has improved.

As far as complaints about the authority go, O’Callaghan said, “There are still bumps in the road, but when you are dealing with people, you’re going to have complaints.”

Turner hadn’t seen the report Tuesday, but said the inspector general needs to be looking at the authority’s contracts for legal fees.

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